Below is a structured extraction and summary of the relevant and actionable financial information from SEPC Limited’s results filing dated August 14, 2025:
1. Auditor’s Note
- Qualified Review Report on both Standalone and Consolidated Unaudited Financial Results for Q1 FY26 (quarter ended June 30, 2025).
- Key Qualifications / Concerns:
- Deferred Tax Asset (DTA):
- Carrying value of DTA includes Rs. 29,315.05 Lakhs (June 30, 2024: Rs. 30,410.91 Lakhs) recognized on carried forward business losses of Rs. 83,891.52 Lakhs (June 30, 2024: Rs. 88,343.94 Lakhs).
- Auditor unable to obtain sufficient audit evidence to corroborate management’s assessment that sufficient future taxable profits will be available to utilize these losses (Ind AS 12).
- Potential adjustment impact on DTA is uncertain.
- Non-current Contract Assets and Trade Receivables:
- Overdue balances of Rs. 6,959.44 Lakhs (net of provision Rs. 926.98 Lakhs) and Rs. 495.18 Lakhs (net of provision Rs. 82.99 Lakhs) respectively, related to stalled projects due to regulatory delays.
- One customer undergoing liquidation; management confident of full recovery based on asset realizability and ongoing negotiations.
- Auditor unable to obtain sufficient audit evidence to confirm recoverability; impact on financials uncertain.
- These qualifications are consistent with prior year and prior quarter reports.
- No other material misstatements or issues noted.
2. Financial Performance
Periods Covered:
- Latest Quarter: Q1 FY26 (Apr-Jun 2025)
- Immediately Preceding Quarter: Q4 FY25 (Jan-Mar 2025)
- Same Quarter Previous Year: Q1 FY25 (Apr-Jun 2024)
- Full Financial Year: FY25 (Apr 2024-Mar 2025)
Consolidated Financials (Rs. Lakhs)
| Particulars | Q1 FY26 (Jun 30, 2025) | Q4 FY25 (Mar 31, 2025) | Q1 FY25 (Jun 30, 2024) | FY25 (Mar 31, 2025) |
|---|
| Revenue from Operations | 20,227.83 | 11,780.25 | 17,582.38 | 59,765.33 |
| Other Income | 151.62 | 831.16 | 238.32 | 4,836.34 |
| Total Income | 20,379.45 | 12,611.41 | 17,820.70 | 64,601.67 |
| Total Expenses | 18,474.73 | 11,608.97 | 16,552.73 | 59,694.46 |
| Profit Before Exceptional & Tax | 1,904.72 | 1,002.44 | 1,267.97 | 4,907.21 |
| Exceptional Items | - | - | - | 1,389.25 (loss) |
| Profit Before Tax | 1,904.72 | 1,002.44 | 1,267.97 | 3,517.96 |
| Tax Expense (Deferred) | 250.00 | - | 460.00 | 1,033.93 |
| Net Profit | 1,654.72 | 1,002.44 | 807.97 | 2,484.03 |
| Other Comprehensive Income (Loss) | (46.81) | (14.42) | (12.48) | (38.07) |
| Total Comprehensive Income | 1,607.91 | 988.02 | 795.49 | 2,445.96 |
| Equity Share Capital | 1,76,515.81 | 1,56,365.98 | 1,40,981.36 | 1,56,365.98 |
| Earnings Per Share (Basic & Diluted) | 0.11 | 0.06 | 0.06 | 0.16 |
Standalone Financials (Rs. Lakhs)
| Particulars | Q1 FY26 (Jun 30, 2025) | Q4 FY25 (Mar 31, 2025) | Q1 FY25 (Jun 30, 2024) | FY25 (Mar 31, 2025) |
|---|
| Revenue from Operations | 7,904.28 | 11,780.25 | 17,582.38 | 59,765.33 |
| Other Income | 151.62 | 831.16 | 238.32 | 4,836.34 |
| Total Income | 8,055.90 | 12,611.41 | 17,820.70 | 64,601.67 |
| Total Expenses | 7,119.91 | 11,594.58 | 16,547.20 | 59,663.92 |
| Profit Before Exceptional & Tax | 935.99 | 1,016.83 | 1,273.50 | 4,937.75 |
| Exceptional Items | - | - | - | 1,389.25 (loss) |
| Profit Before Tax | 935.99 | 1,016.83 | 1,273.50 | 3,548.50 |
| Tax Expense (Deferred) | 250.00 | - | 460.00 | 1,033.93 |
| Net Profit | 685.99 | 1,016.83 | 813.50 | 2,514.57 |
| Other Comprehensive Income (Loss) | (50.76) | (14.43) | (12.48) | (38.07) |
| Total Comprehensive Income | 635.23 | 1,002.40 | 801.02 | 2,476.50 |
| Equity Share Capital | 1,76,515.81 | 1,56,365.98 | 1,40,981.36 | 1,56,365.98 |
| Earnings Per Share (Basic & Diluted) | 0.04 | 0.07 | 0.06 | 0.16 |
3. Detailed Notes / Management Commentary
- Going Concern:
Despite accumulated losses of Rs. 2,09,178.77 Lakhs (Consolidated) and Rs. 2,10,181.57 Lakhs (Standalone), the company prepared results on a going concern basis due to:
- Implementation of resolution plan
- Equity infusion by investors
- Completion of Rights Issue (35 crore shares issued at Rs. 10 face value, Rs. 35,000 Lakhs aggregate; partial receipt of Rs. 17,500 Lakhs post quarter)
- Change in management
- Additional investor funding for working capital
- Pipeline of orders and sanctioned non-fund based facilities
- Exceptional Items:
- FY25 exceptional loss of Rs. 1,389.25 Lakhs relates to loss on extinguishment of financial liability on conversion of Compulsorily Convertible Debentures (CCDs) into equity shares at Rs. 26.73 per share.
- Taxation:
- No current tax provision due to brought forward losses and unabsorbed depreciation.
- Segment:
- Single reportable segment: Engineering, Procurement and Construction (EPC).
- Overdue Contract Assets and Trade Receivables:
- Rs. 6,959.44 Lakhs (contract assets) and Rs. 495.18 Lakhs (trade receivables) overdue related to stalled projects due to regulatory delays.
- One customer undergoing liquidation; management confident of full recovery based on asset realizability and ongoing negotiations.
- Legal / Arbitration Matters:
- International Arbitration (SIAC) case involving SEPC and Twarit Consultancy Services Pvt Ltd (TCPL) with claimants awarded Rs. 19,854.10 Lakhs plus interest.
- Supreme Court ordered payments totaling Rs. 15,950 Lakhs plus interest; TCPL has remitted Rs. 15,950 Lakhs as per schedule.
- SEPC indemnified fully by TCPL and Shri Housing Pvt Ltd under inter-se arrangement; management confident no liability will devolve on SEPC.
- Joint Venture (JV) Matter:
- Mokul Shriram EPC JV won a claim against ECGC for Rs. 26,501 Lakhs plus interest; ECGC has appealed to Supreme Court, case pending.
- Deferred Tax Assets (DTA):
- Recognized on carry forward losses of Rs. 83,891.52 Lakhs (Consolidated & Standalone).
- Management confident of future taxable profits to utilize DTA before expiry.
- Rights Issue:
- 35 crore equity shares issued on rights basis during Q1 FY26; partial proceeds received post quarter.
- Accounting Policies:
- Previous Period Figures:
- Reclassified/regrouped where necessary for comparability.
4. Segment Information
- Single Segment: Engineering, Procurement and Construction (EPC) only.
- No separate segment reporting applicable.
5. Capex, Projects, and Corporate Activity
- Capital Expenditure: Not explicitly disclosed.
- Projects:
- Some projects stalled due to regulatory approval delays, leading to overdue contract assets and receivables.
- Writedowns / Provisions:
- Provision of Rs. 926.98 Lakhs on contract assets and Rs. 82.99 Lakhs on trade receivables related to overdue balances.
- Acquisitions / Disposals / Mergers: None reported.
- Restructuring / Strategic Shifts:
- Implementation of resolution plan and change in management.
- Rights issue and equity infusion as part of financial restructuring.
- Legal / Arbitration:
- Arbitration award and Supreme Court directions with payments made by related party TCPL; SEPC indemnified.
6. Standalone vs Consolidated
- Both Standalone and Consolidated unaudited financial results provided and reviewed.
- Consolidated includes subsidiary SEPC (FZE) - Sharjah and step-down subsidiary Shriram EPC Arkan LLC.
- Subsidiary interim results reviewed by other auditors; consolidated results include their figures.
- Consolidated revenue and profits are significantly higher than standalone, reflecting subsidiary contributions.
Summary Table of Key Financials (Rs. Lakhs)
| Metric | Q1 FY26 Consolidated | Q4 FY25 Consolidated | Q1 FY25 Consolidated | FY25 Consolidated | Q1 FY26 Standalone | Q4 FY25 Standalone | Q1 FY25 Standalone | FY25 Standalone |
|---|
| Revenue from Operations | 20,227.83 | 11,780.25 | 17,582.38 | 59,765.33 | 7,904.28 | 11,780.25 | 17,582.38 | 59,765.33 |
| Other Income | 151.62 | 831.16 | 238.32 | 4,836.34 | 151.62 | 831.16 | 238.32 | 4,836.34 |
| Total Income | 20,379.45 | 12,611.41 | 17,820.70 | 64,601.67 | 8,055.90 | 12,611.41 | 17,820.70 | 64,601.67 |
| Total Expenses | 18,474.73 | 11,608.97 | 16,552.73 | 59,694.46 | 7,119.91 | 11,594.58 | 16,547.20 | 59,663.92 |
| Profit Before Tax | 1,904.72 | 1,002.44 | 1,267.97 | 3,517.96 | 935.99 | 1,016.83 | 1,273.50 | 3,548.50 |
| Tax Expense (Deferred) | 250.00 | - | 460.00 | 1,033.93 | 250.00 | - | 460.00 | 1,033.93 |
| Net Profit | 1,654.72 | 1,002.44 | 807.97 | 2,484.03 | 685.99 | 1,016.83 | 813.50 | 2,514.57 |
| EPS (Basic & Diluted) | 0.11 | 0.06 | 0.06 | 0.16 | 0.04 | 0.07 | 0.06 | 0.16 |
Key Actionable Insights for Investment Analysis Team
- Positive:
- Revenue and net profit for Q1 FY26 consolidated improved significantly vs preceding quarter and prior year quarter.
- Rights issue successfully completed, strengthening equity base by Rs. 35,000 Lakhs (partial proceeds received).
- Management confident on going concern despite large accumulated losses.
- Legal indemnity arrangements mitigate risk from arbitration liabilities.
- Risks / Concerns:
- Auditor qualifications on recoverability of large deferred tax assets and overdue contract assets/trade receivables.
- Significant accumulated losses (~Rs. 2,10,000 Lakhs) remain on books.
- Stalled projects and regulatory delays impacting receivables and cash flows.
- Dependence on successful execution of order pipeline and resolution plan for future profitability.
- No segment diversification; single EPC business.
- No major capex or M&A activity disclosed.
End of Analysis